Last March 7, 2021, Bitcoin‘s price jumped over the $50k barrier again, as its overall market capitalization is around $925 billion.
There will never be over 21 million bitcoin and now there is approximately 18,647,525 bitcoin in circulation. Remarkably, anyone who owns 21 bitcoin or one-millionth of the entire supply is a millionaire today.
Now the one-millionth of the Bitcoin supply is worth over $1 million. One-millionth of the Bitcoin supply is around 21 BTC. This week will be another instance of that moment, as BTC dropped in value a few days ago after reaching an all-time high at $58,354 last February 21.
Ten before the Bitcoin price ATH, crypto writer Pere Rizzo tweeted “One-millionth of the Bitcoin supply is now worth $1 million.” That time, 132,325 addresses hold anywhere between 10-100 BTC, and the owners of one-millionth of the Bitcoin supply are represented amidst the sequence of addresses.
Why Did Satoshi Chose the 21 Million Supply Cap?
The reason why Satoshi Nakamoto chose the 21 million supply limit could have been done for a number of reasons.
An email between Mike Hearn and Nakamoto showed that the Bitcoin network inventor chose the 21 million limit number in order to align with the M1 money supply of fiat currencies similar to the euro and US dollar. In 2008, the M1 money supply was around 21 trillion when Nakamoto published the white paper.
“I wanted to pick something that would make prices similar to existing currencies, but without knowing the future, that’s very hard. I ended up picking something in the middle,” Nakamoto said in the email to Hearn.
Satoshi Nakamoto added:
“If Bitcoin remains a small niche, it’ll be worth less per unit than existing currencies. If you imagine it being used for some fraction of world commerce, then there’s only going to be 21 million coins for the whole world, so it would be worth much more per unit.”
The white paper’s math also displayed that the 21 million number aligns perfectly with some of the interesting design patterns in the software. For example, the 21 million number is equivalent to the block reward halving, together with the 10-minute average time to mine a BTC block. Rewards are cut as well in half every 210,000 blocks mined, and now miners acquire 6.25 BTC per block.
Notably, the smallest unit in the Bitcoin network is a single satoshi or 0.00000001 BTC. Christian Seberino, a Ph.D., explained in 2018 that Satoshi mainly chose the 21 million to “involve floating-point arithmetic.”
Seberino states that although BTC’s supply is arbitrary, the reason behind why Satoshi chose the certain number is quite appropriate.
“It helps avoid errors on most computer systems, and is likely sufficient for all possible transactions everywhere,” Seberino highlighted.
“Floating-point arithmetic is a type of mathematics used by computers to handle decimals. Decimals are often represented with 64 bits where one bit denotes the sign, 11 bits denote an exponent, and, 52 bits denote a fraction.”
The paper written by Seberino adds:
“To avoid rounding errors, it is often a good idea to avoid integers that cannot be represented with only the fraction bits. To be extra safe, it may help to also leave one fraction bit unused. With respect to 64-bit decimals, that would limit integers to 51 bits. The maximum integer that can be represented with 51 bits is just slightly over 2100 trillion”.
Moreover, every time bitcoin (BTC) increases by $50k, and then the holders of 21 BTC will see a wealth increase by another $1 million USD. Many will say that it is not too late to join the clubs if they are even interested in carrying wealth in the future.
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